How do you rack up $1m in debt ?

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#2057596 17-Jul-2018 10:09

I asked my wife if they were going to put her coworker on suicide watch after hearing this news. He would eat nearly a metre on his own, and then take all of the leftovers home. In fact, the last three times they got pizza from there, my wifes boss would have to snatch her a piece before the coworker got there, as he would nab whatever he could and run off like a squirrel hiding it's nuts for the winter. Then he'd come back 5 minutes later for more. She's usually quite busy when it gets delivered, and would miss out because of him.

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quickymart

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#2057757 17-Jul-2018 14:29

He must be a really big boy to eat that much pizza and then some.

Geektastic

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#2057813 17-Jul-2018 15:27

Fred99:

trig42:

I think Dr Rudi's in the viaduct also does Pizza by the Metre (they certainly did some pretty massive Pizza when I was last in there).

They do "pizza by the foot!".

Quick - someone call the metric measurement standards police.

They exist. I recall some green grocer being prosecuted for selling bananas or something in pounds under EU rules in the UK. I think they accepted in the end that it was permitted to state the weight in whatever you liked as long as metric 'came first' or some such compromise.

There were/are some permitted exceptions there, such as beer which is sold in Pints rather than "can I have 0.57 of a litre of your foaming Best, Landlord - and be quick about it!"

muppet

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#2057816 17-Jul-2018 15:29

You walk into the bank.

You explain how well the business is doing, show the bank your books, they show you're doing well, people love your product.

You want to take it big, take on the big names in Pizza.

To get started you're gonna need to market heavily, buy a few more stores, get a distribution warehouse. You'll need to recruit staff for all the roles, have delivery trucks etc.

The bank looks at your books, sees you're doing well, no worries sir here's your loan for $1M let's hope you go huge.

You go to the casino and put it all on red 23. You lose.

I mean how can OP NOT think of 200 ways this could go down?

chevrolux

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#2057818 17-Jul-2018 15:32

Yea $1-million isn't much in the scheme of things.

Remember the Intagr8 debacle?... they owed something like $1.8-mil just to Vodafone for their wholesale services. Does make you wonder why anyone (except the bank) would extend that much credit!!

Taubin

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#2057836 17-Jul-2018 15:59

quickymart: He must be a really big boy to eat that much pizza and then some.

He's certainly not a small bloke. They have cereal for the employees as well, and he usually eats 2-3 bowls a day before lunch time. Usually making comments about "free food" etc... He's a... interesting person...

Really nice, but interesting.

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#2057925 17-Jul-2018 16:49

Geektastic:

There were/are some permitted exceptions there, such as beer which is sold in Pints rather than "can I have 0.57 of a litre of your foaming Best, Landlord - and be quick about it!"

Ordering a "pint" in NZ is pretty much a lucky spin on the size of the glass, - and given that milk is now sold by the litre, I suspect most NZers under 30 would have no idea what a "pint" actually was....

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tripp

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#2057936 17-Jul-2018 17:06

I always find it interesting that when a business goes belly up there is always a big bill to IRD etc for GST / Tax etc.

Once you can't pay your GST or tax on wages you should know you have an big issue and should be talking to people and getting help ASAP. Using tax / gst funds for day to day business is just a big no no.

networkn

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#2057938 17-Jul-2018 17:15

tripp:

I always find it interesting that when a business goes belly up there is always a big bill to IRD etc for GST / Tax etc.

Once you can't pay your GST or tax on wages you should know you have an big issue and should be talking to people and getting help ASAP. Using tax / gst funds for day to day business is just a big no no.

This.

Fred99

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#2057963 17-Jul-2018 18:10

networkn:

tripp:

I always find it interesting that when a business goes belly up there is always a big bill to IRD etc for GST / Tax etc.

Once you can't pay your GST or tax on wages you should know you have an big issue and should be talking to people and getting help ASAP. Using tax / gst funds for day to day business is just a big no no.

This.

Yeah - but from my experience with a friend who lost everything from a failed restaurant business, you've got so much invested in it (not just money - it's your reputation, lifestyle - everything) then there's "living in false hope" that you're going to be able to pay it back... tomorrow - when the business starts working.

Yes - it's stupid / irresponsible. I'd wager that most insolvencies have similar stories behind them - not people deliberately setting out to defraud, but slowly letting themselves be dragged in to a hole, then digging themselves deeper.

IMO what some hucksters do is much worse - setting up assorted ponzi schemes etc - with no "good intent" from the start.

Geektastic

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#2058033 17-Jul-2018 21:50

tripp:

I always find it interesting that when a business goes belly up there is always a big bill to IRD etc for GST / Tax etc.

Once you can't pay your GST or tax on wages you should know you have an big issue and should be talking to people and getting help ASAP. Using tax / gst funds for day to day business is just a big no no.

It requires a lot of discipline to know that, of the $1m in your current account, IRD owns half.

For those who go from PAYE positions to running companies, who never had to worry about it, I guess the temptation to use the money is sometimes too much.

Aredwood

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#2058048 17-Jul-2018 22:34

The biggest factor, Commercial lease terms. You can't quit a commercial lease early unless you pay the landlord a penalty fee equivalent to the entire rent that you would have paid if the lease went full term. This means that in some situations, it is actually cheaper to keep the business open and trading until the lease expires. Than it is to close early.

Friend used to work for a Blockbuster video store, when the chain was still dying. The franchisee of the store he worked for was in exactly that above situation. It was an easy job for my friend though, as the store was normally very quiet.

So a very big incentive for the restaurant owner to keep on trying to keep the restaurant open. At least until the lease expires.

raytaylor

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#2058535 19-Jul-2018 00:35

I dont know if this is a franchise, but to open a Dominos would generally require a bank loan of about $300-$500k plus property costs.

Thankfully for most hospitality franchises, the master franchise has the bank loans, proposals etc already prepared for you.

Also debt becomes a cost of doing business. The more debt you take on, means the more profit you can make. If you read the shareholders reports of many large companies, they talk about paying down more debt than usual when they are having a good year.

Ray Taylor

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Geektastic

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#2058642 19-Jul-2018 09:46

wellygary:

Geektastic:

There were/are some permitted exceptions there, such as beer which is sold in Pints rather than "can I have 0.57 of a litre of your foaming Best, Landlord - and be quick about it!"

Ordering a "pint" in NZ is pretty much a lucky spin on the size of the glass, - and given that milk is now sold by the litre, I suspect most NZers under 30 would have no idea what a "pint" actually was....

Yes the lack of standard measures is a bit perplexing in a country that is normally quite keen on regulation!

Geektastic

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#2058646 19-Jul-2018 09:47

$1 million really isn't that much money in the scheme of things, to be honest. It may sound like it but out there in the real world, it's chump change.

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